The auto recall system is broken. More than 200 million vehicles nationwide have been placed under recall since 2013, yet 53 million of those vehicles are still in service. How is this possible?
The Automotive News editorial "Repair order"(April 29) clearly identified the problem but failed to acknowledge what everyone in the car business knows: The root cause of the crisis is that the current recall system doesn't hold automakers financially accountable for slow-walking repair parts or failing to complete open recalls. The result is a system in which carmakers have a perverse financial incentive to stall and shift the financial burden of their manufacturing defects to dealers and consumers.
The only way to fix this problem is to better align financial incentives to protect the consumer's investment and promote highway safety by getting the most dangerous vehicles repaired or off the road. Public policymakers and other highway safety stakeholders must understand that auto manufacturers view recalls as an expense and that under the current system, they really have no financial incentive to see recalls through to completion. New-car dealers, on the other hand, see recalls as revenue and an opportunity to serve their customers. That's because state laws all across the country give consumers access to free-of-charge recall repair services at local dealerships, paid for by the automaker. When it comes to recalls, the dealers' financial interests line up nicely with their consumers', while the interests of the automakers don't.